Financial Statements Essay

in that respect are four basic monetary narratives that companies utilise. They begin with income statement, statement of possessors truth, equilibrate sheet, and the statement of cash flows. Comp anys use income statements to business relationship how much money they down made and how much they have spent all over a specified period of time. The statement of owners equity is used to report any changes in equity from a bon tons net income or net loss, as well as report changes in the owners investments and withdrawals over a specified period of time. The balance sheet is used to report a companys financial position at any point in time.This statement includes randomness such as what types of assets and their amounts, liabilities, and equity. The statement of cash flows is the last document out of the four basic financial statements. This statement is used to report how much money a company is bringing in (receipts), and how much they are spending (payments), during a ad hoc period of time. Any changes found in assets and liabilities on a balance sheet reflect the revenues and expenses found in the income statement, which in turn results in gains or losses for a company.The statement of cash flows reports more breeding concerning the cash assets that are listed on a balance sheet and a linked, but not necessarily the same, as the net income found on the companys income statement. Financial statements are nothing but numbers on a document when theyre on their own, but together, they can valuable and powerful information for a company to make really big decisions about how to run their company, and how to make decisions for their company in the future. The information is also valuable for investors to make wise and educated decisions for investing in companies.